Market Commentary

Costco Hits Five-week Lows on Slowing Growth

Raza Akram · 1 minute read

Shares of Costco (COST:US) fell last week to trade at the lowest levels since mid-January following the company’s second-quarter results.

Costco reported its revenue grew 6.5% year-over-year to $55.27 billion, below the $55.58 billion expected from Wall Street analysts. Sales were $54.24 billion, below the $54.55 consensus while membership fees exceeded $1 billion to hit $1.03 billion.

As a result, Costco stock closed 2.15% lower on Friday. 

Investors were especially surprised that Costco failed to meet analyst estimates for U.S. comparable sales. On this front, Costco reported a growth of 5.7%, missing the 6.35% consensus. On a global scale, total comparable sales rose 5.2% while analysts were looking for 5.27%.

In February, U.S. comparable sales jumped 3.5%, marking the smallest monthly advance in nearly 3 years. Analysts were looking for an increase of 5.3%.

Costco currently operates 848 warehouses, including 584 in the United States and Puerto Rico, 107 in Canada, 40 in Mexico, 31 in Japan, 29 in the United Kingdom, 18 in Korea, 14 in Taiwan, 14 in Australia, four in Spain, two each in France and China, and one each in Iceland, New Zealand and Sweden,” the company said in the press release.

Costco’s financial results for the second fiscal quarter come after several Congress members were selling the stock earlier this year. Representatives Daniel Goldman, Kevin Hern, and Ro Khanna were all selling COST shares in January, although Mr. Khanna was also buying them.

Costco shares closed at $475.26 apiece on Friday, up 6.57% year-to-date (YTD).